Dan Transfers Property with an Adjusted Basis of $50,000 and an FMV

question 46

Essay

Dan transfers property with an adjusted basis of $50,000 and an FMV of $100,000 to a newly formed Sun Corporation in exchange for 500 shares of Sun stock, which is one-half of the outstanding Sun stock. His daughter, Sylvia, transfers property with an adjusted basis of $25,000 and an FMV of $50,000 for the other 500 shares at the same time. What are the tax consequences of the two transfers, assuming all the requirements of Sec. 351 are met?

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Definitions:

Binge Eat

A disorder characterized by recurrent episodes of eating large quantities of food, often quickly and to the point of discomfort, usually followed by feelings of shame or guilt.

DSM-5 Criteria

The diagnostic criteria set forth in the Fifth Edition of the Diagnostic and Statistical Manual of Mental Disorders for identifying and classifying mental disorders.

Anorexia Nervosa

A psychological and potentially life-threatening eating disorder characterized by self-starvation and excessive weight loss.